The End of Abundance: Economic Solutions to Water Scarcity

315 Pages·2011·2.44 MB·English

by  David Zetland

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The End
of
Abundance
economic solutions to water scarcity
(kindle edition 1.2)
David Zetland
Aguanomics Press
Amsterdam ~ Mission Viejo
2011
The End of Abundance. Copyright © 2011 David Zetland. All rights reserved.
No part of this book may be reproduced without written permission from the
Author, except for attributed quotations of less than a page.
Cover design by Nicholas Newton ([email protected]) photo of
Death Valley, California (© 2008 David Zetland) photo of author (© 2009 Hugh
Zetland) ~ interior typeset in Helvetica with LAT X ~ copy-edited by Sheri
E
Gordon ([email protected]).
ATTN: Quantity discounts are available for orders of 20 or more copies. For
information, please contact the author at [email protected].
Visit endofabundance.com for commentary, resources and updates.
ISBN-13: 978-0615469737
Contents
Prologue
The beginning of the end
Part I: Personal water choices
1 Water from the tap
2 Dirty water
3 The liquid lifestyle
4 Water for profit
5 Food and water
6 Water for power for water
Part II: Social water choices
7 Managers and politicians
8 Dams, pipes and pumps
9 Water and the environment
10 Weather and climate change
11 A human right to water
12 Water wars
Afterword: What you can do
Acknowledgements
Glossary
Notes to the text
Works cited
Footnotes
Praise for the book
List of Tables
1 Water use by sector
2 Private, club, common-pool and public goods
3 Some for Free residential water pricing
4 How to meter a business
5 All-in-auctions for bulk water
6 Human rights to water do not deliver water
List of Figures
1 Demand vs. quantity demanded (shift vs. slide)
2 Average cost pricing encourages shortage
3 Scarcity pricing can prevent shortage
4 Block rate pricing: uniform, decreasing and increasing
5 Market supply and demand vs. scarcity pricing
6 Scarcity prices can prevent shortages
7 How subsidies work
8 Subsidies compared with opportunity costs
Prologue
Marlowe leaned against the Packard and looked at his watch.1
Christ. She's taking her time.
He lit another cigarette. The smoke blew downtown. They had to get
moving.
She ran up, out of breath.
"I got it! Frank won't notice it's gone for a few hours."
"That's not what worries me, babe. We've got to get to San Pedro before the
Esmeralda leaves for Shanghai."
They drove away, taking side streets and ignoring most stop signs. The
freeway wasn't far.
"Philip — Do you think we'll make it?"
"Marlowe, sugar. Only my mother calls me Philip... San Pedro usually takes
15 minutes."
Marlowe hit the gas as they approached the freeway, but something was
wrong.
Cars everywhere — front and back, stretching in every direction.
"Heavens! Where did these cars come from? How are we going to make it?"
"You got me kid. I've never seen anything like it."
"Where are these people going? We're in a hurry! Can't we get around
them?"
"I doubt it. Even the cops are stuck. They never planned on having so many
cars on the road at once. Remember the billboards? They promised abundant
roads for driving freedom."
"But we're going to miss the boat... and my sister's in trouble!"
"Sweetheart, the End of Abundance is gonna put a lot of people in a world of
hurt."
The beginning of the end
Summary: Water shortages are caused by water management institutions
that ignore scarcity. Economic tools can efficiently and fairly manage scarce
water. Demand for water depends on technologies, tastes and prices.
In the drought year of 2009, San Diego faced a water shortage. Local water
managers needed total demand to fall by 20 percent, so they ordered each
household to cut its consumption by 20 percent below historic levels. This
solution sounded good on paper, but it failed to consider that some people had
been conserving water for years. The proposed rule would penalize water misers
for consuming volumes that water wasters could use without facing penalties.
The public outcry surprised managers and politicians. They replaced the 20
percent plan with a regulation on lawn watering and used more water from
storage. Crisis was averted, but the result failed to deliver reliability, efficiency,
or fairness. San Diego's water managers claimed that they did their best in
extreme conditions, but San Diego has struggled with water scarcity since 1946.
They were saved in 1977 and 1992. They were saved in 2009. Will they always
be saved?
These struggles are showing up more often in more places. They are not the
result of incompetent water managers. They are the result of managers and their
political overseers using outdated or inappropriate institutions (customs, rules
and laws) that assume demands must be met, abundant supplies can always be
found, and a functional and efficient system needs only strong pipes and
breakeven revenues. Those institutions may not consider how the value of water
varies with use, reconcile historic rights with current notions of fairness or
efficiency, or appreciate the social and environmental costs of ad-hoc rationing
in shortage.
This book uses economic tools to tackle the end of abundance and manage
the scarcity that results from demand exceeding supply. These tools vary from
the familiar (markets and prices) to the subtle (behavioral cues, property rights,
and community associations). In all cases, they are meant to decentralize
decisions, expand choices for individuals, and improve the way our societies
manage water. The tools use economics because scarcity lies at the heart of
economic thought and economists have a long history of managing scarcity to
produce happy individuals and successful nations.2